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NXP Semiconductors and Advanced Semiconductor Engineering have signed a Memorandum of Understanding (MoU) to form a joint venture in Suzhou, China focused on semiconductor testing and packaging.

It is planned that NXP will hold a 40 percent share whileASE will hold the remaining 60 percent. Terms of the agreement are subject to final negotiations between the two companies and the receipt of necessary approvals from regulatory authorities.

The joint venture will serve the international and domestic Chinese markets, focusing on testing and packaging of a wide range of semiconductors in areas such as mobile communications, consumer electronics and automotive products. Since the new company will be located at NXP’s existing manufacturing site in Suzhou, the parties expect that the joint venture will be able to quickly and efficiently serve customers and support the required fast time-to-market requirements necessary to compete in the high tech arena.

The joint venture is expected to begin operations in Q2 2007. NXP will contribute its existing testing and packaging operation in Suzhou as its initial investment into the joint venture. This joint venture does not affect the other testing and packaging sites for NXP in Asia and Europe.

Ajit Manocha, chief manufacturing officer, NXP Semiconductors, stated, “We are pleased to be able to strengthen our relationship with ASE through the formation of this joint venture and appreciate the willingness of governments to help in this regard. The joint venture combines the expertise of both companies to provide high quality, competitive products to address the needs of electronics manufacturers around the world.”